Declares Fourth Quarter 2014 Dividend of $0.36 Per Share, an
Increase of 12.5%
Strong Performance Demonstrates Earnings Capability of
TriplePoint’s Venture Lending Model
MENLO PARK, Calif.--(BUSINESS WIRE)--
TriplePoint Venture Growth BDC Corp. (NYSE: TPVG) (the “Company” or
"TPVG"), the leading financing provider to venture growth stage
companies backed by a select group of venture capital firms in the
technology, life sciences and other high growth industries, today
announced its financial results for the third quarter ended September
30, 2014. Reflecting the growth of its net investment income, TPVG also
increased its fourth quarter dividend by 12.5% to $0.36 per share.
Third Quarter 2014 Highlights:
-
Core(1) and GAAP net investment income of $3.7 million
($0.38 per share) and $3.5 million ($0.36 per share).
-
Net change in assets from operations amounted to $0.47 per share
versus $0.29 per share in previous quarter.
-
Net asset value per share increased $0.15 to $14.64 as of September
30, 2014.
-
Investment portfolio growth of 20% or $42.0 million to $247.7 million
of fair value.
-
15.2% weighted average yield for debt investments funded in the third
quarter resulting in an overall weighted average portfolio yield of
14.5% as of September 30, 2014.
-
$177.0 million of signed term sheets during the third quarter; closed
$19.5 million of new debt commitments to domestic and international
venture growth stage companies.
-
Increased credit facility from $150.0 million to $200.0 million.
-
Paid a third quarter dividend of $0.32 per share.
“We continued to deploy capital in a disciplined fashion during our
second full quarter as a public company and we are very pleased with the
results,” said Jim Labe, chief executive officer and chairman of the
board of TPVG. “We achieved a 0.75x leverage ratio and investors are
starting to see the full earnings power of our business model. Our
portfolio growth has led to increases in net investment income and
dividends to our stockholders, which are covered by core earnings."
“We remain focused on our targeted yield profile, credit quality, and
return potential from warrant and equity investments in developing our
venture growth stage portfolio,” said Sajal Srivastava, president and
chief investment officer of the Company. “Given our senior team’s
well-established record in this industry, our strong brand, our
disciplined approach, and our growing pipeline, we believe we are
well-positioned to continue delivering attractive returns to our
stockholders.”
(1) Core net investment income is a non-GAAP measure and is provided in
addition to, but not as a substitute for, net investment income. Core
net investment income represents net investment income excluding the
Company’s capital gains incentive fee.
Portfolio and Investment Activity
During the third quarter of 2014, the Company entered into $19.5 million
of new commitments, funded nine debt investments with approximately
$39.8 million in principal value, funded one equity investment for
approximately $0.2 million, and acquired warrants valued at
approximately $0.9 million. The approximately $39.8 million of debt
investments funded in the third quarter had a weighted average yield of
approximately 15.2%, contributing to a weighted average portfolio yield
of 14.5% as of September 30, 2014, up from the weighted average
portfolio yield of 14.4% as of June 30, 2014. The Company calculates
weighted average portfolio yield as the annualized rate of the interest
income recognized during the period divided by the average amortized
cost of debt investments in the portfolio at the beginning of each month
in the period.
As of September 30, 2014, the Company had 73 investments in 23
companies. The total cost and fair value of these investments were
approximately $245.5 million and $247.7 million, respectively.
The following table shows detailed information of the total investment
portfolio as of September 30, 2014.
|
As of September 30, 2014
|
|
|
|
|
Net Unrealized
|
|
Number of
Investments
|
|
Number of
Companies
|
(dollars in thousands)
|
Cost
|
|
Fair Value
|
Gains
|
|
|
Debt Investments
|
$ 237,259
|
|
$ 238,287
|
$ 1,028
|
|
47
|
|
18
|
Warrants
|
5,730
|
|
6,359
|
629
|
|
22
|
|
22
|
Equity Investments
|
2,500
|
|
3,071
|
571
|
|
4
|
|
4
|
Totals
|
$ 245,489
|
|
$ 247,717
|
$2,228
|
|
73
|
|
23
|
Unfunded Commitments
As of September 30, 2014, the Company’s unfunded commitments totaled
$138.0 million, $43.5 million of which is dependent upon customers
reaching certain milestones before being permitted to request funding.
Of the $138.0 million of unfunded commitments, $36.5 million will expire
during 2014 and $101.5 million will expire during 2015 if not drawn
prior to expiration. Since these commitments may expire without being
drawn upon, unfunded commitments do not necessarily represent future
cash requirements or future earning assets for the Company.
Signed Term Sheets
During the third quarter, TriplePoint Capital’s direct originations
platform generated $177.0 million of signed, non-binding term sheets to
venture growth stage companies as compared to $57.5 million generated
during the second quarter. All of these opportunities are subject to a
number of conditions including completion of due diligence, negotiation
of definitive documentation, and investment committee approval, as well
as compliance with TriplePoint Capital's allocation policy. Accordingly,
there is no assurance that any or all of these transactions will be
completed or assigned to the Company even though the Company is the
primary vehicle through which TriplePoint Capital focuses its venture
growth stage business.
Income Statement
For the third quarter of 2014, the Company’s investment income totaled
approximately $7.8 million, representing a weighted average portfolio
yield of 14.5% on its debt investments during the quarter.
Operating expenses for the third quarter of 2014 were approximately $4.3
million, consisting of $1.4 million of interest expense and amortization
of deferred credit facility costs, $0.9 million of base management fees,
$0.6 million of administration agreement expenses, $0.3 million of
general and administrative expenses, $0.9 million of income incentive
fees, and $0.2 million of accrued capital gains incentive fees.
For the third quarter of 2014, the Company recorded net investment
income of approximately $3.5 million or $0.36 per share. The Company’s
core net investment income,(1) which excludes the impact of
the capital gains incentive fee, was approximately $3.7 million, or
$0.38 per share. The Company believes an important measure of the
investment income that the Company will be required to distribute in
2014 is core net investment income, since capital gains incentive fees
are accrued based on unrealized gains but are not earned until realized
gains occur.
For the third quarter of 2014, the Company’s net change in unrealized
gains on investments was approximately $1.2 million, or $0.11 per share,
consisting of approximately $0.3 million of net change in unrealized
gains on debt investments, $0.6 million of net change in unrealized
gains on equity investments, approximately $0.3 million of net
unrealized gains on unfunded commitments, and less than $0.1 million of
unrealized losses on warrants.
The Company’s net increase in net assets resulting from operations for
the third quarter of 2014 was approximately $4.7 million, or $0.47 per
share.
Credit Quality
The Company maintains a credit watch list with borrowers placed into one
of five categories based on management’s judgment of credit quality,
where 1 is the highest rating and all new loans are initially assigned a
rating of 2. As of September 30, 2014, the weighted average investment
ranking of the Company’s debt investment portfolio was 1.97, the same as
at the end of the prior quarter. The following table shows the credit
rankings for the 18 companies with whom the Company has debt investments
outstanding, as of September 30, 2014.
|
As of September 30, 2014
|
(dollars in thousands)
|
|
|
Percentage of Debt Investment Portfolio
|
|
|
Number of Companies
|
Category
|
Fair Value
|
|
|
Clear (1)
|
$
|
15,825
|
|
|
6.6
|
%
|
|
2
|
White (2)
|
|
212,770
|
|
|
89.3
|
|
|
15
|
Yellow (3)
|
|
9,692
|
|
|
4.1
|
|
|
1
|
Orange (4)
|
|
-
|
|
|
-
|
|
|
-
|
Red (5)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
$
|
238,287
|
|
|
100.0
|
%
|
|
18
|
Net Asset Value
As of September 30, 2014, the Company’s net assets were approximately
$144.8 million, or $14.64 per share, as compared to approximately $143.0
million, or $14.49 per share, as of June 30, 2014. The increase is the
result of the Company’s third quarter investment income and unrealized
gains exceeding the Company’s dividend distributions. The per share
calculation is based on the Company’s approximately 9.9 million shares
of common stock outstanding as of September 30, 2014.
Liquidity and Capital Resources
As of September 30, 2014, the Company had total cash of approximately
$9.9 million, with available capacity of $91.0 million under its
revolving credit facility. As of September 30, 2014, the Company had
cash equivalents of approximately $50.0 million, consisting of
short-term investments of U.S. Treasury bills that the Company sold on
October 1, 2014.
Dividend
The Company’s board of directors declared a quarterly dividend of $0.36
per share for the fourth quarter of 2014 payable on December 16, 2014,
to stockholders of record as of November 28, 2014. This dividend
reflects an annualized dividend rate of $1.44 per share, and is a 12.5%
increase from the Company’s dividend of $0.32 per share for the third
quarter of 2014.
Subsequent Events
Since September 30, 2014:
-
The Company closed commitments of $20.0 million and funded $12.5
million in new investments.
-
TriplePoint Capital’s direct originations platform entered into $110.0
million of additional non-binding signed term sheets with venture
growth stage companies.
-
One company prepaid the amounts outstanding under its growth capital
loans totaling $5.0 million, along with the associated end-of-term
payments, and its remaining unfunded commitment was terminated in
conjunction with this prepayment.
Conference Call
The Company will host a conference call at 5:00 p.m. Eastern Time today,
October 27, 2014, to discuss its financial results for the quarter
ending September 30, 2014. To listen to the call, investors and analysts
should dial 877-201-0168 (domestic) or 647-788-4901 (international) and
enter conference ID 20829355. Please dial in at least five minutes
before the scheduled start time. A replay of the call will be available
through November 5, 2014, by dialing 855-859-2056 (domestic) or
404-537-3406 (international) and entering the passcode 20829355. The
conference call also will be available via a live audio webcast in the
investor relations section of the Company’s website, http://www.tpvg.com.
An online archive of the webcast will be available on the Company’s
website for 30 days after the call.
About TriplePoint Venture Growth BDC Corp.
TriplePoint Venture Growth BDC Corp. (the “Company”) (NYSE: TPVG) is an
externally managed, closed-end, non-diversified management investment
company that has elected to be regulated as a business development
company under the Investment Company Act of 1940, as amended. It was
formed to expand the venture growth stage business segment of its
sponsor, TriplePoint Capital LLC. The Company’s investment objective is
to maximize its total return to stockholders primarily in the form of
current income and, to a lesser extent, capital appreciation by
primarily lending with warrants to venture growth stage companies
focused in technology, life sciences and other high growth industries
backed by a select group of leading venture capital investors. More
information is available at http://www.tpvg.com.
Forward-Looking Statements
Certain statements contained in this press release constitute
forward-looking statements as such term is defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and such statements are intended to be
covered by the safe harbor provided by the same. Forward-looking
statements are subject to substantial risks and uncertainties, many of
which are difficult to predict and are generally beyond the Company's
control. Words such as "anticipates," "expects," "intends," "plans,"
"will," "may," "continue," "believes," "seeks," "estimates," "would,"
"could," "should," "targets," "projects," and variations of these words
and similar expressions are intended to identify forward-looking
statements. For a further list and description of such risks and
uncertainties, see the Company's final prospectus filed with the
Securities and Exchange Commission on March 7, 2014, and other reports
filed by the Company with the Securities and Exchange Commission. The
forward-looking statements, and other risks, uncertainties and factors
are based on the Company's beliefs, assumptions and expectations of its
future performance, taking into account all information currently
available to the Company. Forward-looking statements are not predictions
of future events. The Company disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by law.
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
(dollars in thousands, except per share data)
|
|
|
|
|
|
|
As of September 30, 2014
|
|
Assets
|
|
|
|
Investments at fair value (amortized cost of $245,489)
|
|
$
|
247,717
|
|
Short-term investments at fair value (cost of $50,000)
|
|
49,998
|
|
Cash
|
|
7,543
|
|
Restricted cash
|
|
2,374
|
|
Deferred credit facility costs, and prepaid expenses
|
|
3,402
|
|
Total Assets
|
|
311,034
|
|
|
|
|
|
Liabilities
|
|
|
|
Revolving credit facility payable
|
|
109,000
|
|
Payable for U.S. Treasury bill assets
|
|
50,000
|
|
Other payables, accrued expenses, and liabilities
|
|
7,238
|
|
Total Liabilities
|
|
166,238
|
|
|
|
|
|
Net Assets
|
|
$
|
144,796
|
|
|
|
|
|
Preferred stock, par value $0.01 per share (50,000,000 shares
authorized; no shares issued and outstanding)
|
|
$
|
-
|
|
Common stock, par value $0.01 per share (450,000,000 shares
authorized; 9,891,575 shares issued and outstanding)
|
|
99
|
|
Paid-in capital in excess of par value
|
|
142,188
|
|
Net investment income
|
|
6,946
|
|
Accumulated net unrealized gains
|
|
2,561
|
|
Dividend distributions
|
|
(6,998
|
)
|
Net Assets
|
|
$
|
144,796
|
|
|
|
|
|
Net Asset Value per Share
|
|
$
|
14.64
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except per share data)
|
|
For the Three Months Ended
September 30, 2014
|
|
For the Period from March 5, 2014 (Commencement
of Operations) to September 30, 2014
|
|
|
|
|
Investment Income
|
|
|
|
Interest income from investments
|
$
|
7,802
|
|
$
|
14,504
|
Other income
|
56
|
|
152
|
Total investment and other income
|
7,858
|
|
14,656
|
|
|
|
|
Operating Expenses
|
|
|
|
Base management fee
|
850
|
|
1,668
|
Income incentive fee
|
938
|
|
1,157
|
Capital gains incentive fee
|
230
|
|
512
|
Interest expense and amortization of fees
|
1,370
|
|
2,300
|
Administration agreement expenses
|
344
|
|
737
|
General and administrative expenses
|
604
|
|
1,336
|
Total Operating Expenses
|
4,336
|
|
7,710
|
|
|
|
|
Net investment income
|
3,522
|
|
6,946
|
|
|
|
|
Net realized gains
|
—
|
|
—
|
Net change in unrealized gains on investments
|
1,151
|
|
2,561
|
|
|
|
|
Net Increase in Net Assets Resulting from Operations
|
$
|
4,673
|
|
$
|
9,507
|
|
|
|
|
Basic and diluted net investment income per share
|
$
|
0.36
|
|
$
|
0.70
|
Basic and diluted net increase in net assets per share
|
$
|
0.47
|
|
$
|
0.96
|
Basic and diluted weighted average shares of common stock outstanding
|
9,872,564
|
|
9,858,725
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
For the Three Months Ended
September 30, 2014
|
|
For the Period from March 5, 2014 (Commencement
of Operations) to September 30, 2014
|
|
|
|
|
|
|
Weighted average portfolio yield (1)
|
14.5
|
%
|
14.4
|
%
|
Coupon income (1)
|
10.9
|
%
|
11.0
|
%
|
Net accretion of discount (1)
|
0.4
|
%
|
0.3
|
%
|
Net accretion of end-of-term payments (1)
|
3.2
|
%
|
3.1
|
%
|
|
|
|
|
|
Net investment income to average net asset value (2)
|
9.7
|
%
|
8.4
|
%
|
Net increase in net assets to average net asset value (2)
|
12.9
|
%
|
11.5
|
%
|
|
|
|
|
|
Total operating expenses to average net asset value (2)
|
12.0
|
%
|
9.3
|
%
|
Operating expenses excluding incentive fees to average net asset
value (2)
|
8.8
|
%
|
7.3
|
%
|
Income component of incentive fees to average net asset value (2)
|
2.6
|
%
|
1.4
|
%
|
Capital gains component of incentive fees to average net asset value
(2)
|
0.6
|
%
|
0.6
|
%
|
(1) Weighted average portfolio yields for periods shown are the
annualized rate of the interest income recognized during the period
divided by the average amortized cost of debt investments in the
portfolio at the beginning of each month in the period.
(2) Percentage is presented on an annualized basis.
The following table provides a reconciliation of net investment income
to core net investment income for the three months ended September 30,
2014, and for the period from March 5, 2014 (commencement of operations)
to September 30, 2014.
TRIPLEPOINT VENTURE GROWTH BDC CORP
RECONCILIATION OF CORE NET INVESTMENT INCOME
(dollars in thousands, except per share data)
|
Net Investment Income and Core Net Investment Income (dollars
in thousands, except per share amounts)
|
|
|
For the Three Months Ended September 30, 2014
|
|
For the Period from March 5, 2014 (Commencement of
Operations) to September 30, 2014
|
|
|
|
|
|
|
Net Investment Income
|
|
|
$
|
3,522
|
|
$
|
6,946
|
Capital gains incentive fee
|
|
|
230
|
|
512
|
Core Net Investment Income
|
|
|
$
|
3,752
|
|
$
|
7,458
|
|
|
|
|
|
|
Net Investment Income per share
|
|
|
$
|
0.36
|
|
$
|
0.70
|
Capital gains incentive fee per share
|
|
|
0.02
|
|
0.06
|
Core Net Investment Income per share
|
|
|
$
|
0.38
|
|
$
|
0.76
|
For the three months ended September 30, 2014, the Company recorded
accrued capital gains incentive fees of approximately $0.2 million and
for the period from March 5, 2014 (commencement of operations) to
September 30, 2014, the Company recorded accrued capital gains incentive
fee of approximately $0.5 million. The capital gains incentive fee
accrual, as reported under generally accepted accounting principles, is
calculated on the basis of net realized and unrealized gains and losses
at the end of each period. The accrued capital gains incentive fee
related to the hypothetical liquidation of the portfolio (and assuming
no other changes in realized or unrealized gains and losses) would only
have become payable to its investment adviser in the event of a complete
liquidation of its portfolio as of period end and the termination of the
Investment Advisory Agreement (“Agreement”).
The amount of the capital gains incentive fee, if any, which will
actually be payable is determined in accordance with the terms of the
Agreement and is calculated as of the end of each calendar year (or upon
termination of the Agreement). The terms of the Agreement state that the
capital gains incentive fee calculation is based on net realized gains,
if any, offset by gross unrealized depreciation for the calendar year.
No effect is given to gross unrealized appreciation in this calculation.
Source: TriplePoint Venture Growth BDC Corp.